Collaboration and intelligence sharing can boost loss prevention
Retailers need to work more collaboratively, through the sharing of intelligence, in order to maximise their loss prevention activities. By Glynn Davis
Speaking at the 4th Retail Bulletin ‘Retail Loss Prevention Summit 2013’ in London last week Mark Stevenson, national loss prevention manager at Blakemore Retail (Spar), stated: “Loss prevention is the only department in retail that should not be brand competitive. We should all be sat around a table and sharing best practice. Unfortunately loss prevention has taken a step back, due to the economy, but the criminals have not.”
Working together is imperative
Anthony Navaie-Bryan, head of security and investigations at Phones 4U, agrees and says the mobile phone retailers have been increasingly working together to beat the criminals. “This is a common enemy for all of us. We’ve been in a silo but we no longer wanted to be so we got together with the other telco heads,” he says, adding that a centrally held database was created – initially with Carphone Warehouse – to hold information on employees who have been dishonest and where investigations into their conduct had taken place.
This helps the retailer that might potentially be about to employ an individual that has been dismissed from a previous mobile phone retailer. “We share data on employees in a transparent way. We want to be armed with information, which has stopped people hopping among the telcos,” suggests Navaie-Bryan.
Mining the data
Such data mining analytics is the way forward, he suggests, which is a “paradigm shift” away from the previous scenario where “people were protective of their investigations”. Part of this move has been the creation of the UK’s fraud prevention service CIFAS that has brought together a database of cases being investigated (based on a certain level of proof) across various sectors with the objective of reducing the likes of ID and application fraud.
Gaby Devereux, member recruitment manager at CIFAS, says the cross-sector approach is particularly valuable as there have been as many as 34% matches found on the database for individuals perpetrating offences across sectors.
Another shared initiative to combat theft is Action Fraud that was introduced to automate the process of retailers reporting certain levels of theft – particularly conducted over the internet – to the Police.
Targeting online crime
Martin Hewitt, deputy assistant commissioner at the Metropolitan Police, says: “We need to make the virtual environment hostile, not just the store environment. We can only do this if we work collectively. We’ve made significant differences in some sectors.”
He says such collaboration is necessary because the threat from online theft is enormous. “We collectively need to get to grips with what it costs. People think that retailers should simply secure themselves better so there is little sympathy [for them from outside the sector to the fraud committed against them],” suggests Hewitt.
This feeling of isolation has been perpetuated further by the Police’s desire not to deal with many of the lower value crimes committed against merchants, according to Stevenson, who says: “The Police have said they will not respond to low level crime as it affects their numbers.”
The need to record all crimes
He adds that there are discussions over not sending crimes of a value of under £200 to court, which Stevenson says is a worry as it will affect lots of retailers. This non-reporting of crimes – however small – is a mistake, he believes, as “intelligence is the most important tool so everything should be reported in order to create as much information on repeat offenders”.
What has helped Stevenson’s approach to loss prevention was his taking up an operational role as a regional manager at Blakemore that he says “massively opened my eyes” because whereas his own department clearly regards loss prevention as important it is not “on the radar” of most people in the stores.
Working with the stores teams
“They’ve a million and one jobs to do and so as loss prevention managers we’ve got to stop battling with them and instead we’ve got to support them and show them their profits and margins will be better [by adopting loss prevention initiatives],” explains Stevenson, who says part of the strategy he is employing is to set up loss prevention champions, despite losing some of his team to redundancies in these tough times.
Ray Palmer, head of asset protection at B&Q, says this makes loss prevention all the more important: “In today’s environment if your margins are 2-3% and shrinkage is 1% then [tackling] it can make a massive improvement. Every year we need to deliver a 10% improvement just to stand still. Any CEO who doesn’t see the value is short-sighted.”
Business knowledge approach
He is very much an advocate of developing a loss prevention strategy around business knowledge rather than a police-like approach. So rather than putting in tools such as CCTV at B&Q the company is instead focusing on specific categories and products whereby analysis is undertaken of the merchandising and packaging of the most attractive products to criminals.
He suggests protecting goods can be a challenge when the policy of B&Q is to have all the products on show. This is a scenario Jeff Kellogg, vice president of consumer electronics and security packaging systems at MWV, knows very well.
Care needed with secure packaging
He regards security packaging as playing a key role to ward of theft but he warns brands and retailers from adopting too stringent a policy with their packaging whereby the consumer suffers from “wrap rage”.
This ultimately drives them away from buying the goods. Such has been the over-zealous use of security packing by organisations that Kellogg says as many as 40% of UK consumers admit to having been injured by opening such packaging.
He therefore suggests success can only be achieved by balancing the security packaging employed on items while still making them sufficiently attractive for shoppers to want to make a purchase.
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